U. S. Steel Canada Can’t Afford Pension Contributions, Court Monitor Says
10/06/2015 - The court-appointed monitor in U. S. Steel Canada's (USSC) creditor protection case is supporting the company's request to halt pension plan contributions and retiree benefits, but is opposing parent United States Steel Corporation's request to cease providing ministrative and support services for the company.
In a report to the Ontario Superior Court of Justice, the monitor, Ernst & Young Inc., said USSC simply doesn't have enough money to keep paying into the fund or providing retiree health benefits.
"The monitor specifically recognizes ... that this will impact many individuals who have no responsibility for what has happened," the monitor wrote.
"However, the unfortunate (but inevitable) fact is that USSC does not have access to liquidity or financing to honor these obligations in the present circumstances and that, if the order sought by USSC is not made, it will not have the financial resources to continue to carry on in business for the period of time necessary to develop a long-term restructuring solution, and that a near-term cessation of operations will be necessary."
According to The Hamilton Spectator newspaper, the matter might be decided during a hearing scheduled for 7 and 8 October.
At the same time, the monitor said the judge should require U. S. Steel to continue negotiating on providing administrative and operational services to USSC. U. S. Steel is seeking approval to stop providing those services.
U. S. Steel Canada has said it is not in a position to replace those services quickly, nor can it implement them inexpensively, reported the Pittsburgh Business Times.
"Absent a consensual restructuring or a (sale and restructuring/recapitalization process) transaction at this time, USSC needs to bring stability to its operations while it starts the process to disengage itself from (U. S. Steel) as well as to develop new markets and customers for its steel production," the monitor wrote.
"USSC and all its stakeholders will need to work co-operatively with each other to ensure this can occur in an orderly manner and a stable environment."
According to the Business Times, the majority of the services at stake relate to IT support.
"The monitor specifically recognizes ... that this will impact many individuals who have no responsibility for what has happened," the monitor wrote.
"However, the unfortunate (but inevitable) fact is that USSC does not have access to liquidity or financing to honor these obligations in the present circumstances and that, if the order sought by USSC is not made, it will not have the financial resources to continue to carry on in business for the period of time necessary to develop a long-term restructuring solution, and that a near-term cessation of operations will be necessary."
According to The Hamilton Spectator newspaper, the matter might be decided during a hearing scheduled for 7 and 8 October.
At the same time, the monitor said the judge should require U. S. Steel to continue negotiating on providing administrative and operational services to USSC. U. S. Steel is seeking approval to stop providing those services.
U. S. Steel Canada has said it is not in a position to replace those services quickly, nor can it implement them inexpensively, reported the Pittsburgh Business Times.
"Absent a consensual restructuring or a (sale and restructuring/recapitalization process) transaction at this time, USSC needs to bring stability to its operations while it starts the process to disengage itself from (U. S. Steel) as well as to develop new markets and customers for its steel production," the monitor wrote.
"USSC and all its stakeholders will need to work co-operatively with each other to ensure this can occur in an orderly manner and a stable environment."
According to the Business Times, the majority of the services at stake relate to IT support.
